June Nasdaq 100 E-Mini futures (NQM24) are trending up +0.66% this morning as investors cheered forecast-beating quarterly results and guidance from Micron as well as the Fed’s unchanged projection for three rate cuts this year while also awaiting U.S. business activity data and earnings reports from Nike and FedEx.
Micron Technology (MU) surged over +17% in pre-market trading after the memory maker reported upbeat Q2 results and issued above-consensus Q3 guidance. “We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multiyear opportunity enabled by AI,” Chief Executive Officer Sanjay Mehrotra said in the statement.
As widely expected, the Federal Reserve kept its federal funds rate target range unchanged at 5.25%-5.50%, the highest since 2001, for the fifth straight meeting on Wednesday. “The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the Fed said in its monetary policy statement on Wednesday. Also, the Fed’s updated Summary of Economic Projections showed that the median forecast for the federal funds rate at the end of this year was 4.6%, suggesting three rate cuts in 2024, unchanged from the previous projection in December. At the same time, policymakers raised their 2025 median projection to 3.9% from 3.6% and their 2026 median estimate to 3.1% from 2.9%. While Fed Chair Jerome Powell continued to emphasize that officials would prefer to see more evidence that prices are coming down, he also stated that it would be suitable to commence easing “at some point this year.”
“The sum total of this ‘no news is good news’ press conference is that markets continue to have a green light to run higher. This Fed isn’t going to stand in the way of the bull market,” said Chris Zaccarelli at Independent Advisor Alliance.
In yesterday’s trading session, Wall Street’s major averages closed higher, with the benchmark S&P 500 breaching the 5,200 level for the first time. Paramount Global (PARA) climbed over +11% and was the top percentage gainer on the S&P 500 following a report from the Wall Street Journal indicating that Apollo Global Management made an $11 billion offer to buy the company’s film and TV studio. Also, FMC Corporation (FMC) gained about +4% after UBS upgraded the stock to Buy from Neutral with a price target of $84. In addition, Chipotle Mexican Grill (CMG) rose over +3% after the restaurant chain’s board approved a 50-for-1 stock split. On the bearish side, Signet Jewelers Ltd (SIG) plunged more than -12% after the company reported weaker-than-expected Q4 sales and provided below-consensus FY25 guidance.
Meanwhile, U.S. rate futures have priced in an 8.5% chance of a 25 basis point rate cut at the next FOMC meeting in May and a 68.1% probability of a 25 basis point rate cut at June’s monetary policy meeting.
On the earnings front, notable companies like Nike (NKE), FedEx (FDX), Accenture (ACN), Lululemon (LULU), and Darden Restaurants (DRI) are slated to release their quarterly results today.
On the economic data front, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading in a couple of hours. Economists, on average, forecast that the March Manufacturing PMI will come in at 51.8, compared to the previous value of 52.2.
Also, investors will likely focus on the U.S. Philadelphia Fed Manufacturing Index, which stood at 5.2 in February. Economists foresee the March figure to be -2.6.
U.S. Existing Home Sales data will be reported today. Economists foresee this figure to stand at 3.95M in February, compared to the previous number of 4.00M.
The U.S. Conference Board Leading Index will come in today. Economists expect February’s figure to be -0.1% m/m, compared to the previous number of -0.4% m/m.
The U.S. S&P Global Services PMI preliminary reading will also be closely watched today. Economists foresee this figure to stand at 52.0 in March, compared to the previous value of 52.3.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 212K, compared to last week’s value of 209K.
In the bond markets, United States 10-year rates are at 4.241%, down -0.66%.
The Euro Stoxx 50 futures are up +0.85% this morning, tracking U.S. and Asian stock benchmarks higher after the Federal Reserve kept interest rates unchanged and maintained its forecast for three rate cuts this year. Mining, technology, and real estate stocks outperformed on Thursday. A purchasing managers’ survey released Thursday indicated that Eurozone business activity was on the verge of returning to growth in March despite continued weakness in the bloc’s manufacturing sector. Meanwhile, attention now turns to the Bank of England, which is widely expected to keep its benchmark rate unchanged at 5.25%, with the primary focus on clues regarding the timing of a first interest rate cut. In corporate news, Next Plc (NXT.LN) climbed over +4% after the clothing retailer posted solid full-year results and maintained its sales and profit outlook for the current year.
The Swiss National Bank on Thursday surprised the market with a decision to cut its main interest rate by 25 basis points to 1.50%.
France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), and Eurozone’s Services PMI (preliminary) were released today.
The French March Manufacturing PMI came in at 45.8, weaker than expectations of 47.5.
The French March Services PMI was at 47.8, weaker than expectations of 48.8.
The German March Manufacturing PMI stood at 41.6, weaker than expectations of 43.1.
The German March Services PMI arrived at 49.8, stronger than expectations of 48.8.
Eurozone March Manufacturing PMI came in at 45.7, weaker than expectations of 47.0.
Eurozone March Composite PMI has been reported at 49.9, stronger than expectations of 49.7.
Eurozone March Services PMI arrived at 51.1, stronger than expectations of 50.5.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.08% and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.03%.
China’s Shanghai Composite Index closed just below the flatline today as the enthusiasm over the country’s economic recovery waned. Consumer durable goods and healthcare stocks underperformed on Thursday, while financial and real estate stocks gained ground. Meanwhile, Xuan Changneng, a deputy governor of the People’s Bank of China, stated Thursday that China has room to implement additional cuts to banks’ reserve requirement ratio. In other news, Vice Finance Minister Liao Min said at a briefing Thursday that China’s fiscal revenue declined by 2.3% in the January-February period compared to a year earlier, attributing the drop to tax deferrals and tax cuts implemented in the latter half of 2023. In corporate news, China National Medicines Corp. Ltd. climbed over +6% after reporting that its attributable profit and revenue for 2023 increased by around 9% year-on-year to 2.15 billion yuan and 49.70 billion yuan, respectively.
Japan’s Nikkei 225 Stock Index closed sharply higher today, hitting a record high after the U.S. Federal Reserve signaled it remains on track for three rate cuts this year. Financial, technology, and consumer cyclical stocks led the gains on Thursday. Ministry of Finance data showed on Thursday that Japan’s exports grew for a third consecutive month in February as demand improved in the U.S., China, and the European Union. Separately, a business survey indicated that Japan’s factory activity contracted at a slower pace in March, while continued expansion in the service sector contributed to overall growth in the private sector. Meanwhile, Bank of Japan Governor Kazuo Ueda stated that policymakers perceived the risk of needing to swiftly increase interest rates if they delayed ending the massive easing program, a view that influenced the central bank’s decision to take action on Tuesday. In corporate news, Nippon Signal rose over +1% after raising its year-end dividend forecast to 22 yen per share from 20 yen. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.44% to 18.83.
The Japanese February Trade Balance has been reported at -379.4B yen, stronger than expectations of -810.2B yen.
The Japanese February Exports stood at +7.8% y/y, stronger than expectations of +5.3% y/y.
The Japanese February Imports came in at +0.5% y/y, weaker than expectations of +2.2% y/y.
The Japanese March au Jibun Bank Japan Manufacturing PMI arrived at 48.2, stronger than expectations of 47.5.
Pre-Market U.S. Stock Movers
Micron Technology (MU) surged over +17% in pre-market trading after the memory maker reported upbeat Q2 results and issued above-consensus Q3 guidance.
Guess? (GES) climbed more than +11% in pre-market trading after reporting better-than-expected Q4 results and announcing a $2.25 per share special dividend.
Five Below (FIVE) plunged over -12% in pre-market trading after the discount retailer reported weaker-than-expected Q4 results and offered weak full-year guidance.
indie Semiconductor (INDI) gained more than +5% in pre-market trading after the company announced a strategic investment in AI processor leader Expedera.
DHT Holdings (DHT) rose over +2% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $14.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - March 21st
Accenture (ACN), Nike (NKE), FedEx (FDX), Lululemon Athletica (LULU), Darden Restaurants (DRI), FactSet Research (FDS), Energy of Minas Gerais (CIG), Academy Sports (ASO), AAR (AIR), Winnebago Industries (WGO), Worthington Steel (WS), Scholastic (SCHL), Shoe Carnival (SCVL), Mineralys Therapeutics (MLYS), Designer Brands (DBI), Titan Machinery (TITN), Direct Digital Holdings (DRCT), SNDL Inc (SNDL).
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